A Secret Weapon for Winning any Negotiation: Anchoring

A SECRET WEAPON for winning any NEGOTIATION Bringing people round to your way of thinking is never easy. Luckily, there is a process called Anchoring. Anchoring allows you to state your intentions and influence your opponents' opinions. BO0000 3000 000 6 REASONS YOU SHOULD DROP AN ANCHOR Setting out your intentions early on will lead your opponent to consider your opinion as the starting point of the negotiation. Research suggests that, in the majority of cases, negotiators who make their offer first will come out ahead. I'd like to make it clear that I'm not willing to drop below £10,000 4 By grounding the offer with a well thought-out anchor, it is often possible to manage the high aspirations of others. A proactive approach allows the initiating party to take charge of the process and shape the negotiation. 11 Bearing in mind You may have expected to pay less than that, but as I've said, I can't go below £10,000 I what I've said about my limitations, I'm happy to hear your counteroffer 5 6 Moving first gives you a psychological advantage that many individuals find difficult High anchors direct our attention selectively toward an item's positive attributes; low anchors direct our attention to its flaws. to recover from. This is easily worth £10,000. You'll be let down by poor quality if you pay anything below C000 00000 00 7 REASONS ANCHORING WORKS Anchoring takes advantage of a cognitive bias where humans tend to rely too heavily on the first piece of information offered when making subsequent decisions. In the time between the offer being made and the negotiation beginning, the receiving party has time to reflect and become less defensive. 'How could I afford to accept this offer?' has featured in their thinking. Even when people know that a particular anchor should not influence their judgment, psychologically they are often incapable of resisting its influence. In situations where there are no clear market indicators (new products etc.), there is the most scope for perceived value to be different from 4 actual value. Anchoring high allows room for concessions that will satisfy both parties especially as some negotiators want to 'win' as well as secure a better deal than was originally available. Putting your anchor in writing ahead of time lends extra credibility to your position. The psychological assumption that written words somehow hold L The Chnt shal minbra Photograpler fr ang additend costs He Photagraier may iner fr franl, d parting nd t more substance. purfrnme d than seres 2 The apntis nutrefndaeete Chat sanels or chys tengat. Phe Photugrapher Pus to app te ple mi tie speefd abo te deposit slantndt the Chnt. 3. Pruf phutograpks shl bs hend t the Ckat un D The dknt shd provide fe Phutugraper pith aaritten laf of Hee prod from fnd phutugraps tobe prparnd, and pely e nunber and The Law of Iteration, or the broken record ploy, is where a position is repeated so many times that the proposition becomes more credible. fr ah prafi furnats md tmir prictas 0000 0000 4 FACTORS THAT INFLUENCE ANCHORING Research suggests that sad people are more likely to use anchoring than people with happy or neutral mood. Numerous studies have demonstrated that while experience can sometimes reduce the effect of anchoring, even experts are susceptible to anchoring. This has even been demonstrated to affect legal professionals making judicial decisions. 3 Personality has also been shown affect anchoring; people that score highly in tests of agreeableness and conscientiousness are more Likely to be affected by anchoring, while those high in extroversion are less likely to 4 be affected. Some studies have found that the influence of anchoring wanes as cognitive ability increases, although this finding is controversial. DO0000 DO000 0000 3 EASY STEPS TO DROP A PERFECT ANCHOR OF YOUR OWN Anchoring is the first step of an overall process, so the skilled negotiator will have a plan for what follows. What do you want to achieve with the anchor? What will you do next? Consider positioning. Structure the counterparty's expectations in relation to the anchor to promote a less aggressive position and establish dialogue. Likely bargaining range Your Anchor position Tabled first, and then reiterated Their new position as they try to pull you up Their new intended opening position The next step is a good final offer, which provides the other party with satisfaction whilst staying as close as possible to your opening position. The battle has been fought on ground you selected, so the results will be in your favour. Best price! A SECRET WEAPON for winning any NEGOTIATION G The Gap Partnership © www.thegappartnership.com :(